Davy’s interim chief executive, Bernard Byrne, has hired a former colleague and head of customer care at AIB to help in his efforts to rebuild clients’ trust in the embattled stockbroking firm in the wake of a bond-trade scandal.
Tom Potter, a former AIB regional director who took charge of customer care in recent years before leaving the bank in early 2020, is understood to have been entrusted to take a key role in dealing with Davy customer grievances after Mr Byrne asked staff two weeks ago to come forward if they know of other situations where clients may have had a reason to complain. Mr Byrne was AIB chief executive for four years up until early 2019.
Mr Potter was with AIB for about 25 years and would have been a familiar figure in recent years at annual general meetings, dealing with shareholders that had issues with how they were treated as customers. By far the biggest customer issue AIB in recent years has been the role it played it the industry-wide tracker mortgage crisis, which has cost the bank more than €600 million in refunds, compensation, administration expenses and a €70 million provision for a likely fine.
Mr Byrne took over as interim Davy chief executive earlier this month after the departure of his predecessor Brian McKiernan in the fallout from a Central Bank investigation into a 2014 bond trade at the firm. He told staff shortly after taking on the job that he was strengthening systems for handling complaints.
He stressed in a staff email that losses for clients can happen with investments but it would seek to make sure its policies in such situations are “fair, sensible and client-centred”.
“Discuss it with your manager and the complaints team and please do let us know of anything that has happened in the past that we should look at differently,” he said. “We have an important duty to our clients to be fair, and we have one chance to reset the agenda.”
Fined and reprimanded
The Central Bank fined and reprimanded Davy almost four weeks ago in relation to a 2014 case where 16 Davy staff, including top executives, secretly bought at a knockdown price an Anglo Irish Bank bond that the firm was given the job of selling for Northern Ireland property developer Patrick Kearney. He was not told by Davy that it had sold the bond on to a group of its own staff, who wanted to make a profit. Davy’s own compliance team was also kept in the dark.
The fallout has seen any remaining staff that were involved in the trade – including Mr McKiernan, former deputy chairman Kyran McLaughlin and former head of bonds Barry Nangle – exiting Davy, and the firm be put up for sale.
Central Bank director general of financial conduct Derville Rowland said on March 9th that the regulator had not found any suspected criminal activity when investigating Davy that would have required it, by law, to make a report to An Garda Síochána and the Office of the Director of Corporate Enforcement.
However, she said that she would be holding “proactive discussions” with both authorities on the matter as part of ongoing and routine dialogue.
The Business Post reported over the weekend that contact has been made with An Garda Síochána, but that the Garda National Economic Crime Bureau was not currently carrying out an investigation into the matter.